Properties required for the markets development
Markets evolves according to economic laws. Each exchange asset to attract money to the market must have some of qualities, the combination of which attracts or repels investors and traders.
• Liquidity – the ability of assets to turn into cash. The ability of the market to realize the demand of investors and speculators, to buy and sell an asset with a volume that matching with the current market, demand attracts cash to this market. The lack of opportunity to enter the market with amounts exceeding the current offer is a barrier to increased cash flow in this market.
• Provision – real assets that provide the value of a trading instrument. The Saturn Black team is of the opinion that the majority of crypto assets in the existing market are completely unsecured. Due to the youth of the market and the composition of the traders, the vast majority unprofessionally trading in this market, companies that issue crypto assets have attracted large sums of money in cryptocurrencies, promising a future increase in the price of issued tokens without the presence of real products. In fact, some projects have been successful, hitting a wave of growing public interest in crypto assets and their prices increased at the end of 2017 – at the beginning of 2018, like the rise in prices of market pioneers, Bitcoin, Ethereum and others. According to data that published by Forbes, at the moment of mid-December 2017, the amount collected by 234 ICO was $ 3.7 billion. The first quarter of 2018 was a record for ICO – the volume of funds exceeded the amount of funds collected by ICO in 2017. But, along with the fall in Bitcoin prices, the ICO market has also fell down. And the secondary market of crypto assets was not ready for the influx of so many trading instruments, the number of which in 2017-2018 increased by more than 2 times.
• Secondary market. Crypto assets distributed by ICO, needs secondary market and realusing in infrastructure of companies product, offering a token to the market. Due to the lack of implementation of most blockchain concepts, and often due to the complete lacking of a real business model, the tokens of such companies follow the path of infinite price decreasing, up to complete depreciation. And this is not a consequence of malicious actions by manipulators who organized a long “bear game”. Rather, the fall of the market is a consequence of the complete unsecured of assets and the lack of secondary demand in the available markets.
• Reliability. Every investor considers an asset like perspective realizing of products declared by companies, even in cases where the asset used as a speculative instrument only. Investors evaluate the potential of new markets in attracting trade volumes, through company communication with the community, advertising or partnerships, and product introduction into the business infrastructure. In the end, every speculator wants to be sure that this market will not disappear tomorrow.
• Security. Crypto market is young and belongs to the incipient market. Technology from time to time give technical security failures. Thefts are not rare in the crypto market, which negatively affects the development of trading platforms and the value of assets.
• Risk control. In addition to technical safety, we note economic security. Exchange instruments represented by crypto assets are high-risk, and the majority of traders do not appreciate the need to fix losses in order to further participate in exchange trading. Besides, many exchanges are equipped with a weak technical infrastructure that is failing, which implies more risks.
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